Flemming v. Principi

IVERS, Judge, filed the opinion of the Court. GREENE, Judge, filed a concurring opinion. STEINBERG, Judge, filed an opinion concurring in part and dissenting in part.

IVERS, Judge:

On April 2, 1999, the Court, in a single-judge order, vacated a July 29, 1997, Board of Veterans’ Appeals (Board) decision and remanded the matter on appeal to the Board for readjudication. The sole basis for the remand was a change in caselaw that had occurred during the pen-dency of the appeal. See Flemming v. West, No. 97-2150, 1999 WL 219986 (Vet.App. Apr.2, 1999); see also Hodge v. West, 155 F.3d 1356 (Fed.Cir.1998).

The appellant, through counsel, has filed an application for an award of reasonable attorney fees and expenses pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d). The appellant’s EAJA application satisfies all EAJA jurisdictional and content requirements. See 28 U.S.C. § 2412(d)(1)(B); Sumner v. Principi, 15 Vet.App. 256 (2001) (en banc). On October 5, 2001, the Court stayed this matter pending the outcome of Vaughn v. Principi, 15 Vet.App. 277 (2001) (per curiam), or further order of the Court. For the reasons that follow, the appellant’s EAJA application will be denied.

In order to be eligible for an award of EAJA fees and expenses, the appellant must, inter alia, show that he was a prevailing party, within the meaning of EAJA, as a result of the Court’s disposition of his appeal. See Sumner, 15 Vet.App. at 260. In Sumner, the Court ruled that, if the benefit sought in bringing the litigation is not awarded, only a remand predicated upon administrative error confers EAJA prevailing party status on an appellant. Id. at 264-65. In support of this rule, the Court followed the rationale of the Supreme Court in Buckhannon Bd. and Care Home, Inc. v. W. Va. Dep’t of Health and Human Res., 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001).

The Supreme Court’s decision in Buck-hannon prompted this Court to recognize that it is a narrow passage through which an appellant must go to attain prevailing-party status under EAJA. In Thayer v. Principi, 15 Vet.App. 204, 211 (2001), the Court adopted the holding in Buekhannon, ruling that the catalyst theory was not a viable means to attain EAJA prevailing-party status. In Vaughn, the Court held that an appellant who attains a remand based solely upon the enactment of the VCAA is not an EAJA prevailing party. Vaughn, 15 Vet.App. at 280; see also Fandry v. Principi, 15 Vet.App. 299 (2001). Vaughn also held that the inevitable-victory test is not a permissible basis for establishing EAJA prevailing party status. Id. In Sumner, the Court held that when the Court remands a matter to the Board and does not award the benefit that was sought in bringing the litigation, the remand must be predicated upon administrative error for the appellant to be a prevailing party. Sumner, 15 Vet.App. at 264.

Relevant to the present matter, the Court recently held that “a remand on the merits that is based on the rule of retroactive application is not a remand predicated upon administrative error for purposes of EAJA.” Sachs v. Principi, 15 Vet.App. 414, 416 (2002) (emphasis added). Therefore, an appellant receiving a remand under the rule of retroactive application, that is, an appellant who receives a remand solely because of a change in caselaw during the pendency of his or her appeal, is not an EAJA prevailing party. Id. For this reason, the Court will deny the appellant’s EAJA application in the present matter because he was not an EAJA prevailing party. Id.

Relying on a construct purportedly derived from this Court’s prior decisions and, along the way, rejecting Sachs, supra, our dissenting colleague joins our denial of the appellant’s application, yet only after concluding that the appellant was a prevailing party, but that the government was substantially justified in its actions. See 28 U.S.C. § 2412(d). This analysis, however, cannot withstand a close examination.

In Brewer v. West, 11 VetApp. 228 (1998), the Court held that the rule of retroactive application requires that a rule of law announced and applied in a case be applied retroactively by the Court to all matters pending before the Court. In Brewer, the Court affirmed rather than remanded the Board’s decision, and did not have occasion to address whether the Board may have erred in failing to anticipate a change in law or whether the appellant was an EAJA prevailing party.

In Sumner, the Court addressed its decision in Stillwell v. Brown, 6 Vet.App. 291 (1994), its pre-Buckhannon seminal decision defining an EAJA prevailing party. The Court noted that Stillwell had relied on the Supreme Court decision in Shalala v. Schaefer, 509 U.S. 292, 113 S.Ct. 2625, 125 L.Ed.2d 239 (1993), for that decision’s holding that a remand alone conferred prevailing-party status upon an appellant. Sumner, 15 Vet.App. at 262-63. Sumner described the remand in Stillwell, as well as the remand in Schaefer, as having been due to “administrative error,” although the remand in Stillwell was ordered to permit the retroactive application of new case law. Except for a single conclusory sentence, there is no discussion in Sumner describing the administrative error in Stillwell. Indeed, the word “error” does not even appear in Stillwell, nor does it appear, in the context suggested in Sumner, in Schaefer. Stillwell did not discuss or analyze the specific basis for the appellant’s remand on the merits, and did not hold that she had prevailed due to the rule of retroactive application. See Id. at 300-01.

Upon closer examination, it is clear that the Court’s recognition of the appellant in Stillwell as a prevailing party was based on the Secretary’s concession to that status, and on the apparent rule drawn from Schaefer, that a party prevailed by virtue of receiving a remand. See Stillwell, 6 Vet.App. at 300. The extent of the Court’s discussion of prevailing-party status in Stillwell was that, before Schaefer, caselaw suggested the “necessity of a causal relationship between the lawsuit and the relief obtained” for an appellant to be a prevailing party. Id. at 300-01. Stillwell did discuss what was heretofore known as the catalyst theory for establishing prevailing-party status. Id. That theory, however, as noted above, has been invalidated by the Supreme Court and this Court as a basis for recognizing an appellant as a prevailing party. See Buckhannon and Thayer, both supra.

Finally, the principal issue before the Court in Stillwell, and before the Supreme Court in Schaefer, was whether the appellant’s EAJA application had been timely filed. As Sumner specifically recognized, the discussions concerning prevailing-party status in both decisions were in the context of this primary issue. See Sumner, 15 Vet.App. at 263 (“[T]he language in Still-well, supra, which, in and of itself, could be read to mean that prevailing-party status is achieved any time that this Court remands an appellant’s underlying appeal ... must be read in the context of why the remands were ordered in both Schaefer and Stillwell”). The attempt to use those cases to decree this appellant to be an EAJA prevailing party takes them woefully out of their context. Thus, neither Schaefer nor Stillwell, nor Sumner nor Brewer supports the argument that this appellant, whose claim was remanded solely because of a judicially crafted change in law, was an EAJA prevailing party.

At the merits stage of the appeal underlying the EAJA application in the present case, the rule of retroactive application was applied when the Court remanded a matter based solely on the intervening change in caselaw brought about by Hodge, supra. Before Sachs, no prece-dential decision of this Court has addressed the effect, if any, of a remand for retroactive application of a new judicial interpretation on the determination of whether administrative error has occurred with respect to EAJA prevailing-party status. (Our research did not find that other courts had addressed the issue.) Here, as in Sachs, “a remand on the merits that is based on the rule of retroactive application is not a remand predicated upon administrative error for purposes of EAJA.”

Accordingly, upon consideration of the foregoing, the appellant’s EAJA application is DENIED because the appellant is not a prevailing party as required by 28 U.S.C. § 2412(d)(1)(a).